It costs $2 to buy a raffle ticket. If there are 500 raffle tickets sold, and there is one first prize of $250, three second prizes of $100 and five third prizes of $50, what is the expected value of this raffle?

Question

anonymous · Answer

You sell 500 tickets at $2 each, so this yields $1000 before prizes are given out. The total value of prizes is $250*1 + $100*3 + $50*5 = $250 + $300 + $250 = $800.

So how much will be earned from the raffle, since $800 of the gross profit is being given back?